Financial Services Information Systems: Software Cost Analysis Report

This report presents a comparative cost analysis of three software products: a commercial package, a cloud-based SaaS product, and a commercially supported open-source software solution, for a financial institution. The analysis covers a five-year period, evaluating both capital expenditure (Capex) and operational expenditure (Opex) to determine the total cost of ownership (TCO). The report includes a graph illustrating the five-year costs for 400 end-users and concludes that Product C is the most cost-effective option. Key factors considered in the evaluation include security, scalability, maintenance costs, functionality, and ease of use. The report provides recommendations to the manager based on the cost analysis and discusses additional cost factors. The assignment was completed for a Financial Services Information Systems course (CO7218) at the University of Leicester.

Management Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

Relevant Facts:
• The bank intends to purchase a software product
for a new application.
•There are three alternative packages available to
the business in the current scenario.
•They are the Commercial package, a cloud based
SaaS product and a commercially supported open
software.
•A comparative analysis of the five year costs of
the three products is to be conducted for a period
of three years and recommendations have to be
the made to the manager regarding the same
aspect.
•The requirements and the number of users
involved in using the packages are also different.

Graph showing five-year costs:
100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1000
£0
£10,000,000
£20,000,000
£30,000,000
£40,000,000
£50,000,000
£60,000,000
Product Wise 5 Years Total Cost
Product A Product B Product C
Nos. of End-Users
Total Cost

Cost Analysis at 400 End-
Users
Product Total CAPEX Total OPEX TCO
A 450000 86940 536940
B 190000 365000 555000
C 54000 122400 176400

Conclusion:
• On the basis of the above discussion, it can be
suggested that the three alternative products vary
in terms of the Total Capex and Total Opex
significantly over a period of 5 years.
•A thorough analysis suggests that the most cost
effective product in terms of TCO is Product c.
•Product A has the highest Capex followed by
product B and Product C.
•In terms of Total Opex, Product B has the highest
cost followed by Product C and Product A.
•Despite this on an overall basis, Product C
continues to be the most cost effective option and
hence it should be implemented by the manager.

Five additional cost factors:
•The most important factor to be considered is the
security of the option being selected. It is
essential to ensure that the new product is secure
enough.
•The next important factor is scalability. The new
product should fit the size of the bank.
•The costs involved in the maintenance of the
telecommunication lines is an important factor to
consider in the future.
•The functionality and the feasibility of the
software solutions needs to be taken into
consideration.
•The ease with which the bank staff and other
employees are able to use the products should
also be taken into consideration by the
employees.

Bibliographies:
Kaplan, M. (2017). Orchestrating a new approach to
learning. Phi Delta Kappan, 98/7: 23-28. DOI:
10.1177/0031721717702627
Kreiner, K., & Mouritsen, J. (2020). Accounting,
Decisions and Promises. Retrieved March 1, 2020,
from
<https://research-api.cbs.dk/ws/files/44579766/ja
n_mouritsen_accounting_decisions_and_promises_
postprint.pdf>